The German government would not confirm those reports but said their nationals were among those affected by the blast and the possibility of casualties could not be excluded.

"Today Istanbul was hit; Paris has been hit, Tunisia has been hit, Ankara has been hit before," German Chancellor Angela Merkel told a news conference. "International terrorism is once again showing its cruel and inhuman face today."

Ömer Taşpınar, a professor of National Security Strategy at the U.S. National War College in Washington, said Turkey's economy may have been a target.

Tuesday's explosion struck close to a monument called the German Fountain, between the Blue Mosque and the Haghia Sofia — the city's famous landmark-turned-museum and one of Istanbul's most popular tourist destinations.

"This heinous attack occurred in Istanbul's historic heart, and struck Turks and foreign tourists alike," their statement read. "Our thoughts and prayers are with the families and loved ones of all those who have been killed and with those injured."

There was also harsh condemnation from the international community.

British Foreign Secretary Philip Hammond called the blast "shocking" and the European Union's migration commissioner Dimitris Avramopoulos tweeted to "deplore and condemn the attack."

Turkey's deputy prime minister, Numan Kurtulmus, said the bomber was not on the country's watch list of suspected militants.

The Turks are battling Kurdish militants and left-wing groups in addition to the threat of ISIS-linked extremists.

A double suicide bombing blamed on ISIS killed more than 100 people in the Turkish capital Ankara in October. Since then, Turkey has stepped up its efforts to tackle the militants.

Last month, Turkish officials reported they had detained two suspected ISIS militants and foiled a plot to bomb the New Year's Eve celebrations in Ankara.

Taspinar, who has studied ISIS and its strategic goals, said the attack could be very politically damaging for Turkish President Recep Tayyip Erdogan at a critically important time.

"Erdogan's strategy is to deflect attention to PKK, the real enemy he wants to fight," he said of the Kurdistan Workers' Party, which some governments, including Washington, have designated as a terrorist organization.

"He said this morning that Turkey is fighting terrorism on all fronts. But many in Turkey believe ISIS is a problem Erdogan made worse with his support for radical Islamists in Syria," Taspinar said.

"So there is a general tendency to blame him each time there is an ISIL attack. His fight against the PKK, on the other hand, has widespread support."